Facebook wins EU approval for WhatsApp acquisition; just a sign of the times

After a few months of sleepless nights, Facebook founder and young billionaire Mark Zuckerberg can finally relax a bit. The world’s largest social network will likely receive approval by the European Union for its $19 billion purchase of mobile messaging startup WhatsApp, reports said. Citing two people “familiar with the matter” Reuters revealed on Thursday that the European Commission will likely approve unconditionally the largest purchase in Facebook’s 10-year history, with big surprise of the observers.

Indeed the deal has been fiercely opposed by the Old Continent’s powerful telecom industry, which tried to contrast the acquisition by any means from minute zero. An alleged big threat for the sector would be WhatsApp’s plan to add free voice-call services for its 450+ million customers which just “married” Facebook’s one billion users.
So the sector asked the EU to force Facebook to offer some concession after the merger, which will possibly lower the damage that a growing instant messaging free services would give to traditional messaging service providers.

As we reported in July, an EU investigation was considered seriously overseas and both Facebook and WhatsApp anticipated the risks of Brussels lobbying approaching the European Antitrust Commission asking for a central approval of the WhatsApp acquisition. This happened although the deal had been already cleared by US regulators in May, but many saw the move as a smart attempt to help avoid any possible antitrust investigation from the 28 EU countries.

So the deal got scrutinized. The DG Competition set questionnaires to companies that might have been threatened by this social media deal asking telecom providers whether the deal could have harmed the market somehow. But then good signs for the Facebook/WhatsApp family started to appear. Since the kick-off of the investigation on August 29, the Commission has not called the usual meeting that is normally expected for most mergers in the EU to have the situation screened and analyzed, and this led experts to believe that Facebook’s bid will most likely get green-lighted.

The EU’s review and the whole case is seen as an important test for how to apply and adapt European competition law to the new landscape of social media and messaging. An approval may serve as a benchmark for future acquisitions in the digital world. What is certain for sure is that now regulators in the EU are under increasing pressure to define boundaries and limits for technology giants to ensure fair competition, and most of all for protecting the users’ privacy.

This, as we said more the once, is the big knot and the hottest topic in Brussels when it comes to the citizens’ data protection in the new digital world. Actually what happened in the US was that regulators approved the deal asking WhatsApp to stick to its privacy policy, not using its user data for targeting ads, and many observers expect more or less the same treatment in Europe.

If a data protection policy is fully respected, I don’t really see how Facebook merger with WhatsApp could harm the telecom market. I mean, to harm it more than WhatsApp alone, or its rivals such as KakaoTalk, China’s WeChat and Viber are already doing. It’s obvious that telecom operators are losing share, but I also guess this is happening since years, since instant messages free services entered the market.

This is happening since the end of telecom operators’ golden era, yes, the times when consumers of some EU markets were paying up to 2 Euro on a 10 Euro charge card just for the “activation” (remember that?). No news now, it’s just another change in the market, like it is happening for many other sectors, press included, where consumers changed their ways of getting informed.

The European Union competition authority’s final decision is expected to come on October 3, and I am pretty sure you will get the news first from a social network than from a newspaper.

European Central Bank President Mario Draghi, at ECB Youth Dialogue. Lisbon School of Economics. ECB work, some rights reserved.

Mario Draghi, President of the European Central Bank, prepares to read his introductory statement at the Press Conference in Frankfurt am Main, on 7 September 2017, after the meeting of the Governing Council . (ECB Audiovisual Services work, some rights reserved).

German Chancellor Angela Merkel has stressed how hugely important the German automotive industry is for jobs and growth. “We know how important your sector is for our country,” she said at the start of the International Motor Show (IAA) in Frankfurt/Main on Thursday 14 September. Photo: Bundesregierung / Kugler

British Prime Minister Theresa May leaves 10 Downing Street, returning to the House of Commons for the first Prime Minister Questions since the summer recess. September 6, 2017. (UK Government work, some rights reserved).